# In the matter of Shree Krishna Tea Co. Pvt. Ltd. CP (IB)-16-GB-2017

> NCLT judgment dated 2017-07-20. Citation: TCN-2017-NCLT-00718. The case involves an application filed by M/s. Karishma Suppliers Pvt. Ltd. (financial…

- **Court:** NCLT
- **Order date:** 20 Jul 2017
- **Citation:** TCN-2017-NCLT-00718
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-krishna-tea-co-pvt-ltd-cp-ib-16-gb-2017-0eff4dfe

## Summary

### Background

The case involves an application filed by M/s. Karishma Suppliers Pvt. Ltd. (financial creditor) under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of corporate insolvency resolution process against M/s. Shree Krishna Tea Co. Pvt. Ltd. (corporate debtor). The corporate debtor had obtained a loan of Rs. 25,00,000 from the financial creditor on 06-03-2011, agreeing to repay it with 13% interest per annum. Repayments were made until 01-04-2014, after which they stopped. On 12-08-2014, Rs. 10,00,000 was paid towards the principal. The Registry identified defects in the application, which were subsequently rectified by the financial creditor.

## Facts

On 06-03-2011, M/s. Shree Krishna Tea Co. Pvt. Ltd. (corporate debtor) obtained a loan of Rs. 25,00,000 from M/s. Karishma Suppliers Pvt. Ltd. (financial creditor) with an agreement to repay the loan with 13% interest per annum. The corporate debtor made repayments until 01-04-2014. On 12-08-2014, the corporate debtor paid Rs. 10,00,000 towards the principal amount. As of 15-06-2017, the corporate debtor owed Rs. 22,78,257 to the financial creditor. The financial creditor filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate corporate insolvency resolution process. The Registry initially identified defects in the application, which were later rectified. The corporate debtor did not respond to the notice issued by the Tribunal.

## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor meets the requirements of Section 7 of the …

**Ratio:** Section 7 of the Insolvency & Bankruptcy Code, 2016, read with Rule 4 of the

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**Reasoning:** The court found that the defects in the application were rectified, and the application

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**Interpretation:** Section 7 allows a financial creditor to initiate corporate insolvency

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**Application:** The court applied the provisions of Section 7 and Rule 4 to the facts, finding

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## Parties

- **Judges:** P. K. S…
- **Appellants:** M/s. Karishma…
- **Respondents:** M/s. Shree…

## Timeline

- **2011-03-06 — Loan Agre…**: Corporate debtor obtained a loan of Rs.…
- **2014-04-01 — Repayment S…**: Corporate debtor…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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